In today’s real estate environment, many investors are buying up distressed properties and nonperforming notes. Unfortunately for some of these investors, they have a long way to go before they can make any return on their investment if they have to evict the person living there. Evicting these people who are not paying rent or making mortgage payments can be a very long arduous process.
In the great State of California, this process can take anywhere from 60 to 150 days. We’ve all heard the phrase “time is money” but for real estate investors, it can never be underestimated. For every day the non-paying squatter lives in the investor’s home, the investor loses money. The investor is either not getting the monthly returns they expected on their cash purchase, or even worse, they may be on the hook for a large monthly payment to their lender if the property was financed. In California, rent on a 3 bedroom home can easily eclipse $3,000 per month, so that’s potentially $100 per day an investor could be losing by having a non-paying person in their home.
Before investing in real estate, understand the potential eviction process you may have to go through if you buy an occupied home, because if you don’t, you could really be in a mess you never planned on being in.
There are 5 possible outcomes in evicting a tenant which I will educate you about in this 4 part series entitled “California Eviction Process”. No matter which of the 5 outcomes you end up having to pursue, it is an absolute must that you work with an experienced real estate broker and more importantly an eviction attorney.
I’ve been involved in distressed real estate my entire career, and I have seen several evictions go awry because the attorney or real estate broker didn’t follow the proper protocol. Courts are backed up and judges try to be lenient, so having just one trial “continued” can cost you 1-3 months in lost time and rental payments.
Read the whole series on eviction:
- California Eviction Process – Part 1: What it Means for Investors
- California Eviction Process – Part 2: Cash for Keys
- California Eviction Process – Part 3: Property is Occupied by a Borrower
- California Eviction Process – Part 4: Tenant Occupancy
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